BERLIN: The European Central Bank supports Germany’s Bundesbank in its appeals for higher wage deals in Germany, Der Spiegel magazine quoted ECB Chief Economist Peter Praet as saying yesterday.
Low wage agreements were needed in some crisis-hit countries in the eurozone to bolster competitiveness, the magazine quoted Praet as saying.
By contrast, in countries like Germany where “inflation is low and the labour market is in good shape”, higher earnings increases were appropriate.
This would help bring average wage developments in the eurozone in line with the ECB’s inflation target of close to 2 percent, his argument continued.
The Bundesbank historically has been a strong advocate of wage restraint, but with euro zone inflation stuck below 1 percent and consumer prices rising just 1 percent in June in Germany, Europe’s biggest economy, some fear deflation.
Reuters
